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Source: MIL-OSI Submissions
Source: CoreLogic

There was no let-up in mortgage lending flows last month, with another $7.3bn of activity taking place – almost $2bn more than the same month last year. That’s occurring even with continued stringency around credit standards, such as stable interest-only lending and controlled overall high LVR lending flows. There’s been some speculation lately that the LVR speed limits could soon be reinstated for investors, although it’s at least worth noting that this could create technical problems around the mortgage deferral scheme (which runs until March next year).

The momentum that built up in mortgage lending activity in July and August simply rolled on into September. The Reserve Bank (RBNZ) figures just released at 3pm today show that there was $7.3bn of lending last month, up by $1.8bn from the same month last year. Lending flows for the year to date have been $49.6bn, now slightly ahead of the same time last year ($48.8bn). As the first chart shows, both owner occupiers and investors have contributed to the sharp upswing in the past few months, after the April/May lull.

Looking at the different cuts of the data, interest only lending held steady at about 26% of September’s total, broadly the level it’s been at for four months in a row now – and well below the figures of about 40% in 2015-16. Meanwhile, even with the LVR speed limits currently on hold, the banks themselves are keeping a pretty tight rein on loans at >80% LVR – these were only 10.8%% of the total in September (see the second chart).